Hidden Opportunities for Growth and Innovation

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Most companies try and innovate from the ”inside out”–improve products, talk to customers and generally do more of the same. A better idea is to innovate from the ”outside in.” This means trying to look through the eyes of the customer and change how they live, work and play for the better.

Products and Customers
1. Develop better products
2. Understand
3. Find more

Traditionally, companies have approached innovation from an ”inside out” perspective–develop better products and you’ll automatically attract more customers and your business will thrive. Therefore, companies:

Try and differentiate their product offerings: which is fine, except everyone gets so busy making marginal improvements that nobody looks beyond current offerings for new growth opportunities.

Organize the marketplace into tidy segments: which is helpful, except when new segments arise that nobody has even dreamt of.

Attempt to grow by merger and acquisition: which is all right, except everyone focuses on making the marriage work rather than accessing new markets.

Extand their brands into adjacent markets: which is okay for incremental growth but no good for accessing dynamic and emerging new markets.

Listen to their customers: which again is fine, except customers only evaluate the future by what are already familiar with. They won’t demand what they don’t know is technically feasible.

All of these practices are valuable to a point, but they share a fundamental weakness: they are all using the organization’s point of view and perspective. They never go beneath the surface and examine what it is customers want. Lacking this big-picture perspective, it’s easy for companies to miss growth opportunities that are literally right before their eyes.

A much better way to innovate is to work from the ”outside in”: understand what it is customers are trying to achieve and then deliver on the custoner’s unexperssed desires, dreams, fantasies and so forth.

Products and Customers
1. What do people want?
2. What can’t they buy yet?
3. Why do they buy?

Put another way, to look from the outside in will require that you look at the marketplace from a broader vantage point altogether. This means going:

Beyond understanding your existing customers and looking instead at the underlying behavior of people.

Beyond existing brands and portfolios.

Beyond arbitrary classifications like categories or industries. These are blurring anyway.

Beyond organizing your company around functions and instead giving all you people a challenge to improve your value proposition.

Beyond the arbitrary boundaries and silos created by strategic business units.

Beyond the habitual domains most of your people are already familiar with so fresh ideas can be cross-pollinated and grafted in.

The logical end result of an inside out perspective is to achieve a competitive advantage in the marketplace. By contrast, the logical end result of the outside in perspective is to achieve a customer advantage that hopefully is unique.

When a company replaces the pursuit of competitive advantage with the pursuit of customer advantage as a guiding principle for the enterprise, the now focus does not mean that it must necessarily undergo a complete reorganization, either in its structure or in its practices. In fact, the new focus may not even require a company to scrap the strategies it has already been successfully using to promote and expand existing product lines. Instead, those activities are temporarily de-emphasized permit the elasticity required to see the opportunities in plain sight, to identify new opportunity spaces and to find and execute strategies and actions that create new growth and help to reinvent the core business model.

If I had asked customers what they wanted, they would have told me they wanted a faster horse.

Hidden in Plain Sight

How to Find and Execute Your Company’s Next Big Growth Strategy

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If you genuinely want to bring successful and innovative products to market again and, focus on doing three things:

Understand the people you’re trying to serve as the individuals they are and learn what they are truly trying to accomplish in their daily routines. Know the context within which they live.

Forget all the golden rules about how to succeed in business today. Instead, innovate across people’s behaviors. This is the only way you’ll be able to define the spaces of greatest commercial opportunity because they will be things nobody has yet imagined.

See yourself from the ”outside in.” Formulate your strategies around the way people behave. Go beyond satisfying the needs and wants of your customers and instead engage customers by coming up with innovations that fit their behaviors like a glove. Have a goal of creating genuine transformational experiences and not just communicating the features and benefits of what you have to offer.

For the last twenty-five years, I have investigated why some innovations, business models, business strategies, and marketing and branding tactics hit the mark, and why others do not. Throughout my research and experience, one idea has surfaced consistently: the biggest, best, brightest, and most successful opportunities for innovation and growth are right here, in front of us, and we often don’t see them or act on them. These opportunities are yours for the spotting and taking. But to see them and profit from them, you first must abandon some of the tried and proven conventions of innovation, marketing, and strategy formulation; you must discard some of today’s common assumptions and management practices and adopt a fresh way of planning and executing your strategies today and your innovation and growth strategies of tomorrow. It is my hope to show you how.

Deliver Exceptional Service Experiences

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When customers do have to contact you, provide them with a great experience. Never rest on your laurels because your competitors won’t be doing that. Keep removing the roadblocks and getting the basics right. Align all your metrics in this area to be customer facing and deliver great outcomes.

The competitive advantages of delivering consistently great experiences to customers are obvious and clear-cut:

Highly satisfied customers will buy more in the future.

Happy customers will also tell their friends where to buy.

Happy customers have lower overall support costs.

Having happy customers is great for your own staff’s morale.

This should lead to increased cross-sale revenues.

You should incur less legal and complaint handling costs.

Your brand’s value will soar with more satisfied customers.

To achieve these benefits, there are usually five roadblocks that need to be addressed and then overcome:

1. The “What problem?” perception: denial that there is a problem at all. Overcome this by gathering hard data on how many sales are lost through poor service.

2. The idea that it’s “Someone else’s problem”: and therefore they need to make the changes required. Offset this by getting all department heads together and reviewing the mistakes being made. If shame doesn’t work, start charging each department for the costs of fixing their mistakes.

3. The notion that some problems “Can’t be fixed” and will always be with us is hogwash. Identify the root causes and then come up with some radical and far-reaching solutions that get everyone thinking. Questioning the status quo is hard, but all the best organizations do it regularly, so you don’t want to get left behind.

4. The “We can’t afford to fix this properly” mindset: because everyone is so busy and we have no budget available to develop any solutions. The simple fact is that you have to make the time and create the budget that is required because the payback is so substantial it cannot be ignored. You have to get people thinking: “How can we afford not to do something about this?”

5. The idea “But our customers are happy with the way we do things already”: which is usually a myth or a subtle form of denial. The real issue in this case is whether you are willing to let a competitor steal a march on your company by offering superior service. Customers may not be leaving you in droves, but if you’re not delivering great customer experiences at the present time, you leave an opening for someone to enter your market who will.

Once you overcome the roadblocks, you still have to get busy figuring out how to deliver awesome levels of ongoing service and experiences to your customers. No matter where you’re starting from, this will always be a challenge, because there will be a lot of momentum to keep doing what you’ve always done. You’ve got to break the mold of business as usual in order to deliver better levels of customer service.

There are three general challenges in delivering to your customers genuinely exceptional service experiences:

1. Measure what really matters to customers, not to your organization
2. Focus all processes on the customer’s needs
3. Harness every part of your service delivery chain to deliver great service

1. Measure what really matters to customers, not to your organization: which means you need to gauge your performance in relation to the things that customers care about. From a customer view, they see this as:

“Did my problem get solved?”

“How was I treated?”

“Did I get the right answer the first time?”

To find out these kinds of things, you need to ask customers what they thought of the experience as soon as possible afterwards and while everything is fresh in their mind. Measure how well you’re doing in getting everything aligned and working smoothly to help customers.

2. Focus all processes on the customer’s needs: rather than trying to make things easier to manage for the company. To achieve this, you have to:

Know your customers individually so you can avoid wasting their time.

Make it fast and simple for customers to interact with your company and get things done.

Provide maximum choice and flexibility in all you do.

Set high expectations and then deliver what you promise.

Match the service delivered to the needs of each customer.

3. Harness every part of your service delivery chain to deliver great service: because today service generally extends well beyond the walls of your own corporation. You have to align the economic interests of your outsourcers and suppliers with the service treatment you want to provide customers. This will also involve educating managers and providing training on how to get the right things done. Ideally, service delivery should be a one-stop shop where the customer can get everything done with a single contact to your company. That will always take some alignment and organizing with partners to get things done.

It’s time to move away from yesterday’s speed metrics, which put customer support in the position of whipping boy or neglected department starved of attention and funding. By practicing the seven core principles we have set out that we collectively call the Best Service Is No Service, companies can raise the bar for supporting customers and after all, each of us is a customer, so this will benefit everyone. Every company can work to challenge demand for service, remove those dumb things done to customers, and strive to deliver the Best Service, which is, in essence, no service. Good luck!

–Bill Price and David Jaffe

Listen to What Customers Are Saying

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Don’t simply look at customer service needs as an irritation. Look at each contact as a chance to listen to and learn about your customers. Listen to the feedback they give and see whether there aren’t some hidden gems embedded in there. Let customers teach you the best way to grow your business.

Instead of spending money on conducting market research to find out what makes your customers tick, you should instead make it a point to pick up on what your customer service people are already hearing day in and day out. Customers requiring after-sales service are rarely if ever shy about telling your people what they think. All you need to do really is organize yourself to pick up on these clues and do something worthwhile with all this information.

The three keys to making this happen are:

1. Teach your customer service people how to listen and when to do it
2. Find smart ways to listen which are also cheap and effective
3. Turn what you hear into viable action within your organization

1. Teach your customer service people how to listen and when to do it: because if you look around your organization, you’ll probadly find that there are already front line staff who interact with customers hundreds or even thousands of times each workday. Encourage all these people to workout whether the complaints they are hearing or the issues they are resolving are one-off incidents or more indicative of systemic problems. Train people to listen for underlying causes, themes and systemic trends. Encourage them to try and get to the root causes of problems and then to track how often those causes lead to people calling in. It may be helpful to have weekly team meetings where front line staff can share their war stories about what customers are saying at the present time. Another alternative is to establish one central database where all complaints, insights and customer suggestions are collected and then made available for managers to analyze.

2. Find smart ways to listen that are cheap and effective: or put differently, develop a broad range of listening posts and then gear everyone up to take advantage of that information. The possible techniques you can use to listen are very broad:

Set up in-store kiosks and run surveys.

Invite customers to fill out comment cards.

Offer opt-in e-mail surveys.

Have easy-to-use feedback options on your Website.

Conduct post-sale telephone surveys.

Record some actual service calls for analysis.

Analyze the notes that customer service people keep for recurring themes, emerging trends or noteworthy key words or phrases. Correlate this data.

Build automated feedback tools into your company Website, into customer warranty enrollments, into every contact you have with your customers.

Set up company blogs or wikis where customers can leave their feedback, ideas and suggestions for others to agree with or disagree with.

3. Turn what you hear into viable action items within your organization: use all this feedback to drive actions that improve things rather than retaining the status quo. By gathering feedback, you’re raising customer expectations that things will change for the better, so you’d better be using this material to drive some ongoing improvements. The cycle in action here is:

1. Capture the insights embedded in customer feedback
2. Establish root causes and set priorities for improvements
3. Set clear accountability for improvements
4. Execute solutions that provide benefits for customers and your organization

Learning what customers are saying is all well and good, but this information only becomes valuable when it is backed up with action to address the various issues being raised. Obviously, it will take effort and organization to mine the data and establish the themes and issues customers are speaking about. It might be helpful to establish an “improvement council” that meets periodically to review the data, set priorities and establish who will be accountable for making the right things happen.

You would expect the senior management of your organization to need to sign off on the specific recommendations that get made, but until you have a cycle going, it’s unlikely any improvements will get made. Someone has to take responsibility for establishing what needs to happen and then allocating the resources that will be required to make it happen.

Stop coping with customer demand for service, which simply increases customers’ frustration; instead, challenge customer demand for service so that, ideally everything works perfectly, eliminating defects and confusion so there is no need at all for customers, ot even prospective customers, to contact the company for information or for help.

–Bill Price and David Jaffe

Delivering improved service is rarely the responsibility of the customer service area alone. Companies need to work out who is accountable for service and reated issues, have a range of mechanisms to make that accountability stick, and involve all the departments to deliver Best Service.

–Bill Price and David Jaffe

There is no excuse for companies not to listen. No additional investment in customer research is required; companies will obtain huge insight from the contacts they are getting today. They need, first, to be prepared to listen. Then they need to apply the techniques that allow them to tap into all the free or cheap forms of feedback that their customers and staff can provide. Listening is not the end game, however improvements for the customer and company. Many companies are stuck today in a cycle of measurement that doesn’t drive action. Companies that are service leaders use these sources of feedback to drive continuous improvement. They build it into the fabric of how the business runs. What is critical to making this improvement cycle work is not just the listening part but also allocating the resources to discover what it’s telling the company and bow to fix it.

–Bill Price and David Jaffe

Don’t Shoot the Messenger

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Always remember that your customer service people are not the cause of your problems. They lie elsewhere and they need to be addressed. Identify the real owners of the ongoing problem and make them accountable to set things right. Empower your customer service people to do the right thing for customers.

It’s a myth to expect your customer service manager to be responsible for all the reasons why customers contact your company. In reality, contact centers generate very few reasons for customers to be unhappy at all. It’s time to get rid of the silo mentality and let the true generators of the problems customers strike stand up and be identified.

1. Tear down the walls–identify who is truly responsible for the issues
2. Make accountability stick–let the issue owners resolve root causes
3. Empower the front line–so they can do the right thing for customers

1. Tear down the walls: identify who is truly responsible for the various issues that end up at the customer contact centers for resolution. If you identify the underlying root causes of issues, then the real owners can be encouraged to take action. This allows customer service to get beck to supporting the customer rather than making an attempt to mop up problems caused by the company shooting itself in the foot.

The real problems here are usually:

Lack of information: because contact centers tend to report on how fast they handle customer complaints rather than the underlying reasons why the contacts occurred in the first place.

Ignorance: no genuine attempt is made to ascertain who owns the root causes of the most common problems faced by customers. It’s not at all easy to decide who or what is the cause of dissatisfied customers, and therefore this often gets in the “too hard” basket. To get to the bottom of problems, its often necessary to ask “Why?” at least five times. For example:
1. “Why did the customer call us?”
2. “Why did he or she get that letter from us?”
3. “Why didn’t we know he or she had already paid?”
4. “Why doesn’t our system allow for different methods?”
5. “Why doesn’t past payment history get factored in?”

You can always tell when you’ve identified the real owners of customer problems because that person will own the part of the business that drives the customer contact and the person will have the authority and budget required to fix the root causes. If the owner you’ve identified doesn’t meet two criteria, keep looking, because you have not got there yet. In most companies, the real owners of root causes tend to be direct reports to the CEO.

2. Make accountability stick: let the issue owners analyze and then resolve the root causes. Deciding who is accountable and who in theory “should” be doing something about it is all well and good, but that’s just the beginning of the story, not necessarily the happy ending everyone wants. More than likely, the owner of the problem will respond with:

Denial–”Your data is obviously incorrect.”

Anger–”Don’t be absurd.”

Refusal–”Even if true, we’ve got better things to do.”

Bargaining–”Our budget is already allocated.”

To overcome these kinds of reactions, there are really only three approaches you can take:

Get some old-fashioned sponsorship: which usually means getting the CEO to champion accountability and make it an important part of his or her agenda. If the CEO won’t apply pressure from the top, it’s hardly surprising nobody else takes any notice of the issue.

Reset your targets to make them more meaningful: or in other words, develop new targets that incorporate the needs of customer service. Add performance indicators that draw attention to the changes required to improve customer service delivery. Get everyone pulling in the same direction.

Provide financial accountability: by charging customer service costs to their true owners. Make each department show the true costs of providing customer service that it is generating in its financial statements. This is a certain way to draw attention where it genuinely falls due.

3. Empower the front line: so they can do the right for customers. Allow the people who come face to face with dissatisfied customers make decisions and take actions that will produce the best results for customers. Let them do this with minimal supervision or oversight. Drop having a blanket policy that must be followed whenever a specific situation arises. Instead, train customer service people to be “enablers” who are free to figure out what it will take to make things right from the customer’s point of view. Then back these people to the hilt.

When you empower customer service personnel in this way, you demonstrate that you trust their judgment to act responsibly. You allow them to structure solutions that make sense to customers and that are also fair and reasonable for the company. Inevitably, this also generates cost savings for the company, because you don’t need to provide ongoing supervisors to sign off on everything customer service people want to do. You liberate the front line and turn them into customer satisfaction generators rather than cost minimizers.

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